The Teamsters Union boss vanished in 1975 spawning numerous conspiracy theories, the most popular of which was that he was killed by mobsters.
FBI agents obtained a search warrant for a farm in Milford Township, outside Detroit, where aerial television pictures showed a large rectangular hole was being excavated close to a barn.
According to the search warrant obtained by The Associated Press, federal agents were searching the Hidden Dreams Farm for "the human remains of James Riddle Hoffa".
When directly sked if they were looking for Hoffa's remains, FBI spokeswoman Dawn Clenney said, "Could be," and declined to comment further on the agents' presence.
Investigators could take several weeks to complete and was in response to a new tip. "This is a very significant development," said Ms Clenney.
The farm was a place where organised crime figures used to meet and is close to where Hoffa was last seen.
Shady past
Hoffa was one of America's most powerful union leaders, touted for bringing almost all American truckers and many other transport workers under the Teamsters union.
But in the mid 1960s Hoffa was aggressively investigated for corruption by then-Attorney General Robert F. Kennedy.
Hoffa was convicted along with six others on fraud and conspiracy charges and of diverting more than one million dollars in union funds for personal use.
He was jailed for 13 years, but had his sentence commuted by then president Richard Nixon, on the condition that he stayed away from union activities.
Rumours
On the day of his disappearance, Hoffa was supposed to meet with reputed mob figure Anthony "Tony Jack" Giacalone and New Jersey Teamsters boss Anthony "Tony Pro" Provenzano.
They had arranged to meet at the Machus Red Fox restaurant in Bloomfield Township, an affluent suburb north of Detroit.
For years, there have been rumours in the township that Hoffa had been killed and buried in the surrounding neighbourhood.
Giacalone and Provenzano were long suspected of Hoffa’s disappearance, with the motive of keeping Hoffa from regaining power over the union after he was released from prison.
Local resident, Deb Koskovich said she heard the rumour about Hoffa's body two decades ago from a neighbour when she moved next door.
"We laughed and that was the end of that," said Koskovich, 52.
"I never thought about it again until today so apparently there have been rumours."
30-year-old mystery
There are countless conspiracy theories, many bizarre related to Hoffa’s disappearance, with the mystery played out in the 1992 biopic "Hoffa" starring Jack Nicholson.
The FBI has in the past mounted a number of searches for Hoffa's remains, on one occasion investigators dug up a swimming pool, but found nothing.
Mobster hitman Richard "The Iceman" Kuklinski, who died in jail this year, reportedly claimed Hoffa's body was crushed in a compacted car sent for scrap metal.
Two years ago, investigators searched a house in Detroit where another mafia figure claimed Hoffa had been killed. Another urban legend had him buried under the Giants Stadium in New York.